Some Christmas cheer from the Guardian

CLAPTON

The current shortage of housing is caused by excessive government controls on the availability of land, of excessive levies on new builds making the price of new builds expensive, of excessive red tape and on restriction on mortgage lending.

There are two types of solution
-more government controls and more government restrictions and burocacy, e.g. rent controls, restrictions on ownership, new laws, lots of new civil servant to enforce the new rules

-remove the existing restrictions and allow new house building

the_flying_pig

Jason74 wrote: »

...You could for examplehave more favourable treatment of BTL purchase of new builds, thereby ensuring that any money used for property investment directly contributes to increased supply (this also stops current "FTB" properties being choked off by BTL....

that'd be interesting.

75% tax on profits + 75% tax on capital gains on BTL-ers who hoover up existing houses, recognising that this activity has negative consequences for society.

20% tax on profits + zero tax on capital gains on BTL that funds new developments that would otherwise not happen.

CLAPTON

the_flying_pig wrote: »

that'd be interesting.

75% tax on profits + 75% tax on capital gains on BTL-ers who hoover up existing houses, recognising that this activity has negative consequences for society.

20% tax on profits + zero tax on capital gains on BTL that funds new developments that would otherwise not happen.

how exactly does one determine that a development would not otherwise happen?

the_flying_pig

CLAPTON wrote: »

how exactly does one determine that a development would not otherwise happen?

fair question.

i suppose one possible scenario might be 'BTL only estates' - the whole thing is built by groups of BTL-ers, organised by middlemen. kinda a very little bit PFI-ish if that's not a dirty word.

a much simpler but less good/precise way would just be to presume that any newbuild is a good thing & offer time-limited tax advantages [tho less generous than in my earlier post] to all BTL accordingly.

CLAPTON

the_flying_pig wrote: »

fair question.

i suppose one possible scenario might be 'BTL only estates' - the whole thing is built by groups of BTL-ers, organised by middlemen. kinda a very little bit PFI-ish if that's not a dirty word.

a much simpler but less good/precise way would just be to presume that any newbuild is a good thing & offer time-limited tax advantages [tho less generous than in my earlier post] to all BTL accordingly.

why not simply reduce all the extra charges on new builds for all (infrastructure, social housing etc)?

much simpler and requires no complicated new legislation, no extra civil servants, no compliance monitoring, no expensive appeals etc

grizzly1911

Compulsory purchase and government builds social housing diverting HB spend, from BTL landlords, to finance the build and ongoing management.

Volume housing provided, that will never be provided solely from the private sector. Hasn't in the past and will not be met in the future.

Reduces pressure on private stock and private build programs.

Loughton_Monkey

Jason74 wrote: »

.....And the one thing that there can be no doubt about, is that BTL does make it harder for first timer buyers to get on the ladder.....

This is where I take fundamental issue with your argument.

Sweeping aside any 'Devonian' muddles about people on housing benefit or on low pay and cannot reasonably afford their own house, let's concentrate on the "real" argument which would be about (very roughly) 66% of the population who traditionally have been able to become owner occupiers.

Again, we need to sweep aside the "noise" that surrounds the whole supply/demand/price issues such as prices themselves, mortgage availability, rate of new building etc. and instead concentrate on the BTL landlord and/or the FTB.

So just concentrate on any house for sale at any one time. Maybe a 'First Time Buyer' sort of house. At some point, this house comes on the market and everyone is free to bid for it. Unless you seriously think that BTL landlords are willing to pay "over the odds" for a house, then your argument fails. It is my understanding that landlords tend to be a bit greedy, and people who have been on "Property Development Classes" [I haven't] are told never to buy unless they can get it at 15% below market price.

BTL comprises roughly 13% of mortages. A BTL mortgage is not easier to get than an owner occupier mortgage. Nor is it cheaper. So if a FTB has the necessary wherewithall to buy, then he can buy. OK, a few BTL landlords might be sniffing around - just as a few dealers might be around in the furniture auctions if that's how you want to buy the furniture for your house. Live with it. Dealers, and Landlords are not there to ramp up what they pay. More the reverse.

My strong view, stated many, many, times, is that any difficulty in buying is down to personal choices and behaviour. The physical price of a house goes up and down. Always has done. Currently, they may be 'on the high side' but are nowhere near their peak in real terms, and financing costs are at record lows.

So if your behaviour/choice is to have children (and lose an income) before buying, then that's your choice but don't be surprised that it severely curtails what you can borrow. If your behaviour/choice is to rent a 'decent' house of the type you wish to buy, then don't be surprised that the monthly costs will likely exceed what it would have cost to buy since the landlord needs to make a profit. Hence saving for your own deposit is severely hampered. If your choice is to wait for an 'ideal' house as your first buy, then don't be surprised that this will take a much bigger mortgage/deposit, and that prices may go up faster than you can save.

There was once a time when the majority of people understood this. It's not rocket science after all. Any 'normal' boomer knew this. We all knew instinctively that (a) you must live at home or in extremely cheap accommodation to start off with, (b) you should ideally maintain two incomes to maximise what you can borrow, and (c) you must then go out and buy the 'best' house you can afford - even though it's likely to be a damp mid-terrace that needs some work. Beyond that, and despite that, buying the first house was a struggle and not easy.

There is no reason on this earth as to why this state of affairs should be any different now. Houses are a rare and valuable commodity. Always have been and always will be. Houses should not be confused with other "goods" like cars, electronics, food, clothes..... All these things are far far cheaper in real terms due to mass production, science, cheap foreign labour, innovation, cheaper/better transport. But neither land nor houses can be "mass produced" by cheap foreign labour.

CLAPTON

grizzly1911 wrote: »

Compulsory purchase and government builds social housing diverting HB spend, from BTL landlords, to finance the build and ongoing management.

Volume housing provided, that will never be provided solely from the private sector. Hasn't in the past and will not be met in the future.

Reduces pressure on private stock and private build programs.

Nearly all housing in the UK has been built by the private sector.

The introduction of draconic planning restrictions after the war has seen the price of land with planning permission rocketing in price (sometimes 10,000% more expensive than agricultural land).

This has meant that many ordinary people can't afford the artificially inflated prices for homes and this continues to cause the shortage of decent sized homes that people can afford to buy.

The government partly offset the artificially high prices caused by their own policies by funding council housing but that has largely stopped.

The solution is to free up more land and reduce costs of new builds and provide sufficient mortgage funds.

grizzly1911

CLAPTON wrote: »

Nearly all housing in the UK has been built by the private sector.

The introduction of draconic planning restrictions after the war has seen the price of land with planning permission rocketing in price (sometimes 10,000% more expensive than agricultural land).

This has meant that many ordinary people can't afford the artificially inflated prices for homes and this continues to cause the shortage of decent sized homes that people can afford to buy.

The government partly offset the artificially high prices caused by their own policies by funding council housing but that has largely stopped.

The solution is to free up more land and reduce costs of new builds and provide sufficient mortgage funds.

The price of land is only part of the problem.

Plenty of cheap land up near Aberdeen according to Hamish.

Where is all the unlimited mortgage funding going to came from? More dodgy derivatives? If there were unlimited mortgage funding what impact may that have on prices? How many people would actually be sufficiently credit worthy to tap into this unlimited funding under the new prudent risk assessment criteria without state support?

CLAPTON

grizzly1911 wrote: »

The price of land is only part of the problem.

Plenty of cheap land up near Aberdeen according to Hamish.

Where is all the unlimited mortgage funding going to came from? More dodgy derivatives? If there were unlimited mortgage funding what impact may that have on prices? How many people would actually be sufficiently credit worthy to tap into this unlimited funding under the new prudent risk assessment criteria without state support?

there will be no increase in price if there is sufficient supply of land with planning permission

we need a steady stream of finance for people with reasonable income and not unlimited funding.